Immigrants Key To Canada’s Economic Recovery Post-coronavirus

Coronavirus pandemic is currently having a devastating impact on economies around the world. Welcoming immigrants is key to Canada’s economic recovery post-coronavirus.

The IMF expects the global economy will contract by three (3) per cent in 2020, in what it calls the worst economic downtrend since the Great Depression.

Just days prior it announced travel restrictions to help curb the spread of coronavirus, Canada announced it would welcome over One million newcomers between 2020-2022, mainly to help grow its economy.

Of course, little did federal government officials know at the time of the announcements that the global economy would be heading towards such a major downturn.

Why Canada needs more immigrants?

The current circumstances may lead one to legitimately question whether Canada should continue with its immigration plans, or cut back.

There is no doubt that the coronavirus crisis will require Canada to modify its immigration plan.

However, it would not be sound economic policy to massively scale down Canada’s immigration levels beyond the COVID-19.

The reason for this is that Canada needs newcomers more than it ever had in its modern history to promote economic development.

Canada’s desire to welcome over 300,000 newcomers per year is meant to help reduce its demographic challenges.

Canada has very low birth rates and one of the world’s aged population. As more Canadians reach retirement age, it will grapple to replace them in the labour market since the country does not have enough young population. This is where immigration comes in.

Population growth is crucial because it fuels labour force growth. The two ways to improve an economy is by adding more workers and using this worker more productively.

Canada will see a full economic upturn

The general agreement among economists is that the Canadian and global economy should recover fairly quickly once special measures have been eased.

This means that more Canadian citizens will be back to work, and there will also be more job opportunities for newcomers.

Canada’s economy prior COVID-19 is very revealing of what we can expect once the economy is back to normal.

Leading up to the coronavirus outbreak, Canada’s unemployment stats recorded low rates and its economy enjoyed ten years of growth following the 2008 global financial crisis.

Remember that Canada maintained high immigration levels even following that crisis, which by experience, was the correct economic decision to make.

One major reason for the low rate of unemployment pre-coronavirus is many of Canada’s over Nine (9) million baby boomers were retiring, which caused a scarcity of workers as the economy was growing. This benefitted Canadian-born workers and newcomers alike.

Similarly, Canadian-born workers and newcomers are poised to benefit from the post-COVID economic rebound. In the coming years, it is realistic to expect Canada to deal with worker scarcities again, and even more so than prior to coronavirus as all of Canada’s nine (9) million baby boomers reach the age of retirement within the next ten years.

Immigration policy always has long-term economic impacts and we should not lose sight of that even in the wake of COVID-19 crisis.

Immigrants will help to create more jobs post-covid.

Canada’s economy is facing difficult moments, but immigration will play a vital role in supporting Canada’s economic rebound since immigrants will help to fill newly-created jobs and also help job creations in other ways.

Statistics Canada research indicates that newcomers have a high tendency to start businesses. In one of its recent studies, Statistics Canada found that immigrant businessmen created twenty-five (25) per cent of new private sector jobs between 2003 and 2013, even though they accounted for seventeen (17) per cent of companies studied. In other words, immigrant businessmen punched above their weight when it came to job creation.

Hence, immigrant businessmen post-COVID will create businesses that will create new jobs for fellow Canadians.

Finally, new immigrants bring significant savings with them which helps to fuels the economic activity that is vital to fueling job creation in Canada.

Consider the important proxy of foreign students. According to the Canadian government, the over 600,000 foreign students in Canada contribute over $22 billion in economic activity every year which supports nearly 200,000 Canadian jobs.

Canada has over eight (8) million newcomers, who make an even bigger contribution to economic development and job creation than international students.